This PSU bank stock witnesses cup pattern breakout before Union Budget

As the stock is trading at a 29-month high, it is also trading above its important short as well as long-term moving averages.

The month of January underwent a roller-coaster ride for the market participants as in the first half of the month, the benchmark indices logged solid gains while in the second half, nervousness in the global markets and continued selling by FIIs led to erasing of all the gains. Despite the fact that the headline indices faced the wrath of selling pressure in the second half of the month, there were certain sectors, which delivered a standout performance in the month of January.   

One such sector was Nifty PSU Bank, which gained as much as 16.45 per cent and emerged as the top-performing sector of the month. Interestingly, all the stocks of this sector have managed to deliver positive returns in the month of January. However, one stock that commands special attention is Canara Bank.   

Canara Bank has jumped 24 per cent in the month of January and it is the second-best performing stock after Bank of Baroda in Nifty PSU Bank index. Technically, the stock, on a weekly time scale, has witnessed the breakout of a cup-like pattern. The cup pattern has a length of nearly 10-week while it has a depth of a little over 24 per cent.   

As the stock is trading at a 29-month high, it is also trading above its important short as well as long-term moving averages. These averages are in the desired sequence, which suggests that the trend is strong. The stock’s relative strength index (RSI) is above the 60-mark, which is bullish. The daily MACD is in a rising trajectory sustaining above the zero line, which further validates positive bias.